While unconventional measures implemented by the Bank of Japan focus the attention of most Western authorities, reluctant to admit competitive devaluations, can the meeting of finance ministers and Central Banks Governors of the G20 stop the decline of the Yen?

Even if the government has always said it was not manipulating its currency, the finance minister Taro Aso conceded that measures designed to get the country out of deflation caused a decrease of the Yen more than originally planned. The Central Bank has just opted for the status quo in February, in order to calm things down, after the announcement of the early resignation of the Governor Shirakawa Maasaki, three weeks before the end of his term.

The third world power hopes to avoid its international partners’ criticisms during the G20, after Angela Merkel has already expressed its concerns about the Japanese monetary policy and G7 published a statement explaining the importance of letting the market determine the exchange rate.

However, the U.S. seems to accept the Japanese strategy. Indeed, the Deputy Secretary of the Treasury Lael Brainard has just told he was supporting Japan’s measures to boost growth.

The current trend could therefore maintain its vigor. According to a Japanese survey Nikkei/TC Tokyo Corp, the government is supported by 68% of the public, respondents approving his action against deflation. Also, Kazuma Iwata, candidate for governor of the central bank, has recently stated that redemptions of government bonds abroad were a credible option. Even if the finance minister disagrees with such extreme measures, primarily intended to decrease the value of the Yen, the next governor, which will chair its first meeting in early April, will have to reach the new inflation objective fixed last month at 2%. What encourage traders to propel the dollar beyond the JPY 95.

From a graphical viewpoint, the situation has not changed. Profit taking before the G20 meeting gives us the opportunity to strengthen our long position at a good price, between JPY 92 and JPY 93, to target JPY 100 level. The change in governance of the BOJ should allow a better cohesion between the government and its central bank.